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S&P 500 4100: Springboard For The Next Opportunity
The chart below shows that the benchmark S&P 500 (SPX) made a major bullish trend change on January 23rd by rising and remaining above major resistance at its 200-day moving average and its January 2022 major downtrend line. The chart also shows that this rally has stalled at the 4100 area, which represents the December highs.
S&P 500 daily since July 2022
The graphic below shows that the Asbury 6, our Tactical risk management model, is currently equally balanced at three positive (green) and three negative (red) constituent metrics. This suggests the US broad market is at a Tactical inflection point, and underscores the importance of the SPX 4100 level as a likely springboard for the broad market index’s next significant directional move.
The Asbury 6 through 02-17-2023
More About The Asbury 6: The Asbury 6, updated daily in our Research Center, is a combination of six diverse market metrics that were combined to look beyond the day-to-day, up-and-down noise of the stock market to determine its real health — in much the same way as a doctor checks the patient’s vital signs during an office visit. The “A6” helps us to identify real, sustainable market advances or declines from computer-driven traps for investors. Four or more metrics in one direction indicate a Tactical bias. The dates in each cell indicate when each individual constituent turned either positive (green) or negative (red). When all Asbury 6 are positive, market internals are the most conducive to adding equities exposure to portfolios.
The next graphic shows the latest ranking of the sectors of the S&P 500 according to investor asset flows, based on our SEAF (Sector ETF Asset Flows) Model. The SEAF Model was created to quantitatively identify long/overweight opportunities in US market sectors. SEAF does this by “following the money” as it tracks the investor assets moving around the 11 Select Sector SPDR ETFs, which together comprise the S&P 500.
We have found that following the movement of money identifies these new opportunities sooner, and more accurately, than waiting for them to become apparent on a price or relative performance chart.
SEAF Model Sector Rankings through 02-16-2023
Our model currently shows that most of the highest-ranked sectors are “risk on” sectors like Technology, Communication Services, and Consumer Discretionary. It also shows that the lowest-ranked sectors, like Health Care, Energy, and Consumer Staples, are typically defensive. This means investors are currently positioned for a positive reaction to the important SPX 4100 level.
Looking ahead, we will be closely watching the latest updates to our Asbury 6 model to help confirm favorable conditions for more US stock market strength.
Asbury Research subscribers can get more detail on our latest analysis, and udates to our quantitative models, by logging into the Research Center.
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Disclaimer: This is provided for information purposes only and is not intended to be a solicitation to buy or sell securities. The performance indicated from back-testing or historical track record may not be typical of future performance. No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC. The risk of loss trading in financial assets can be substantial. Therefore, you should carefully consider whether such trading is suitable for you in light of your financial condition.